M/s Anant Concrete Products Pvt. Ltd., Meerut V. ITO, Meerut

ITA 1632/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3574 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: PREMJIT S KASHYAP
• Keywords: Reopening of assessment; Capital asset; Depreciation; Accommodation entries; Competent authority; Assessment record; Reason to believe; Revenue expenditure; Reassessment proceedings; Borrowed satisfaction
• Section: 142(1); 32; 147; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.1632/DEL./2017 ASSESSMENT YEAR 2009-2010 ANANT CONCRETE PRODUCTS PVT. LTD., 226, PREM PURI, RAILWAY ROAD, MEERUT. PAN AACCA8060D VS. THE INCOME TAX OFFICER WARD-1(1) MEERUT. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI PREMJIT S. KASHYAP, C.A. FOR REVENUE : SHRI KAUSHLENDRA TIWARI, SR. D.R. DATE OF HEARING : 03.11.2017 DATE OF PRONOUNCEMENT : 08 . 11.2017 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), ALIGARH, DATED 11 TH JANUARY, 2017 FOR A.Y. 2009-2010. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 16 TH SEPTEMBER, 2009 AT RS.1,66,990 AT MEERUT. LATER ON, INFORMATION WAS RECEIVED FROM DIT (INV.), NEW DELHI THAT SEARCH UNDER SECTION 132 OF THE ACT HAD BEEN C ONDUCTED BY THE INVESTIGATION WING, NEW DELHI, IN THE CASE OF SHRI S.K. JAIN GROUP OF CASES, WHO HAVE PROVIDED ACCOMMODATION ENTRY AT RS. 9 LAKHS TO THE 2 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. ASSESSEE COMPANY. ON THE BASIS OF THIS INFORMATION, ACTION UNDER SECTION 147 WAS TAKEN. NOTICE UNDER SECTION 148 OF THE I.T. ACT WAS ISSUED ON 3 RD JULY, 2013 BY INCOME TAX OFFICER, WARD-1(1), GHAZIABAD. THE CASE OF THE ASSESSEE-COMPANY WAS TRA NSFERRED TO ITO, WARD-1(1), MEERUT BEING JURISDICTION LIES WITH THIS WARD. THE A.O. AFTER COMPLETING THE RE-ASSESSMENT PROCEEDINGS ON MERIT, MADE ADDITION OF RS. 9 LAKHS UNDER SECTION 68 OF THE I.T . ACT VIDE RE- ASSESSMENT ORDER UNDER SECTION 147/143(3) OF THE I. T. ACT, DATED 31 ST MARCH, 2015. THE ASSESSMENT WAS COMPLETED BY ITO, W ARD-1(1), MEERUT. 2. THE ASSESSEE CHALLENGED THE ADDITION ON MERIT B EFORE LD. CIT(A). HOWEVER, THE APPEAL OF ASSESSEE HAS BEEN DI SMISSED ON MERIT. THE ALSO RAISED ADDITIONAL GROUND OF APPEAL BEFORE LD. CIT(A) CHALLENGING THE RE-ASSESSMENT ORDER AS BAD IN LAW, ILLEGAL AND WITHOUT JURISDICTION. THE LD. CIT(A) HOWEVER, NOTED THAT RE- ASSESSMENT HAS BEEN INITIATED ON THE BASIS OF INFOR MATION RECEIVED FROM INVESTIGATION WING. THEREFORE, ADDITIONAL GROU ND WAS ALSO DISMISSED AND APPEAL OF ASSESSEE WAS ACCORDINGLY DI SMISSED. 3 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. 3. THE ASSESSEE IN THE PRESENT APPEAL HAS CHALLENG ED THE INITIATION OF RE-ASSESSMENT PROCEEDINGS UNDER SECTI ON 148 OF THE I.T. ACT AS THERE WAS ADDITION OF RS.9 LAKHS UNDER SECTI ON 68 OF THE I.T. ACT, 1961. 4. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD. D.R. ALSO PRODUCED ASSESSMENT RECORD AND FILED THE CORRESPOND ENCE BETWEEN THE A.O. AND THE ASSESSEE ON RECORD. 5. IT IS WELL SETTLED LAW THAT VALIDITY OF RE-ASSE SSMENT IS TO BE DETERMINED WITH REFERENCE TO THE REASONS RECORDED F OR REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE I.T. AC T. THE ASSESSEE FILED COPY OF THE REASONS RECORDED FOR ISSUING OF N OTICE UNDER SECTION 148 OF THE I.T. ACT AT PAGE 45 OF THE PAPER BOOK WH ICH READS AS UNDER: NAME & ADDRESS OF THE ASSESSEE : M/S. ANANT CONCRETE PRODUCTS (P) LTD., 226-PREMPURI RAILWAY , MEERUT. ASSESSMENT YEAR - 2009-10 PAN - AAECA5788Q 4 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. REASONS FOR ISSUE OF NOTICE N/S 148 OF I.T. ACT, 1 961 INFORMATION HAS BEEN RECEIVED FROM THE INVESTIGATIO N WING OF THE INCOME TAX DEPARTMENT THAT THE ABOVE NAMED A SSESSEE HAD OBTAINED ACCOMMODATION ENTRIES RECEIVED FROM VA RIOUS PAPER COMPANIES OF SHRI SURENDRA KUMAR JAIN GROUP I N LIEU OF CASH DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR : 2009-10. I HAVE PERUSED THE INFORMATION CONTAINED IN THE REP ORT AND EVIDENCES GATHERED. THE REPORT PROVIDES DETAIL OF M ODUS OPERANDI AND EXPLAINS HOW THE UNACCOUNTED MONEY OF THE BENEFICIARIES ARE PLOUGHED BACK IN ITS BOOKS OF ACC OUNTS IN THE FORM OF BOGUS SHARE CAPITAL/PREMIUM/LOAN AFTER ROUT INE THE SAME THROUGH BANK ACCOUNT(S) OF THE ENTRY OPERATORS FLOATED BY SHRI SURENDRA KUMAR JAIN GROUP. ENTRY OPERATORS WER E IDENTIFIED AFTER THOROUGH INVESTIGATION ON THE BASIS OF DEFINI TIVE ANALYSIS OF THEIR IDENTITY, CREDITWORTHINESS AND. THE SOURCE OF THE MONEY ULTIMATELY RECEIVED BY THE BENEFICIARIES. IN THE IN STANT EASE, THE ASSESSEE IS FOUND TO BE THE BENEFICIARY OF ACCOMMOD ATION ENTRY OF RS.9,00,000/- FROM SUCH ENTRY OPERATORS CONTROLL ED BY SHRI SURENDRA KUMAR JAIN GROUP DURING THE F.Y. 2008-09 R ELEVANT TO ASSESSMENT YEAR 2009-10 AS PER THE SPECIFIC DETAIL OF TRANSACTION. THE TRANSACTIONS MADE BY THE ABOVE REFERRED CONCERN S ARE WITHOUT-ANY SECURITY AND THIS COMPANY IS NOT MUCH K NOWN IN THE MARKET, THEREFORE, ANY TRANSACTION MADE BY THE ABOV E REFERRED 5 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. COMPANY IS WITHOUT ANY CREDENCE AND IS BEYOND HUMAN PROBABI LITY. THE ASSESSEE HAS RECEIVED UNEXPLAINED SUMS FROM THE ENTRY OPERATORS AS -PER THE ABOVE DETAIL AS PER INF ORMATION AVAILABLE WITH THE UNDERSIGNED. AS EXPLAINED ABOVE, THE IDENTITY, CREDITWORTHINESS AND GENUINE-NESS OF THE TRANSACTIO NS WITH THE PERSONS FOUND TO BE ENTRY OPERATORS CANNOT BE ESTAB LISHED. I, THEREFORE, HAVE REASON TO BELIEVE THAT ON ACCOUN T OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY-ALL. MATERIAL FACTS NECESSARY FOR THE ABOVE ASSESSMENT YEAR, THE INCOME CHARGEABLE TO TAX TO THE EXTENT OF ENTRY MENTIONED ABOVE FOR A.Y. 2009-10 HAS ESCAPED ASSESSMENT WITHIN THE MEANING, OF SECTION 147 OF THE I. T. ACT, 1961 AND IS A FIT CASE FOR IS SUE OF-NOTICE U/S 148 OF THE I. T. ACT. SD/-XXX 9-07-2013 ITO, W-1(1), GZB. 5.1. THE ABOVE REASONS WOULD SHOW THAT REASONS HAV E BEEN RECORDED BY ITO, WARD-1(1), GHAZIABAD WHEN RE-ASSES SMENT ORDER HAVE BEEN PASSED BY ITO, WARD-1(1), MEERUT. THE A.O . IN THE RE- ASSESSMENT ORDER DATED 31 ST MARCH, 2015, SPECIFICALLY RECORDED THAT THE CASE OF THE ASSESSEE-COMPANY TRANSFERRED TO ITO , WARD-1(1), MEERUT BEING JURISDICTION LIES WITH THIS WARD. 6 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. 5.2. THE LD. D.R. FILED COPY OF THE LETTER DATED 2 0 TH MAY, 2014 WRITTEN BY THE ASSESSEE-COMPANY TO ITO, WARD-1(1), GHAZIABAD ON RECEIPT OF NOTICE UNDER SECTION 142(1) AND NOTICE U NDER SECTION 143(2) OF THE I.T. ACT. THE ASSESSEE IN THIS LETTER EXPLAI NED TO ITO, WARD-1(1), GHAZIABAD WHO ISSUED NOTICE UNDER SECTION 148 AND R ECORDED REASONS FOR THE SAME THAT HE HAS BEEN ALLOTTED PAN AT MEERUT AND ONE MORE PAN WAS ISSUED WRONGLY BY THE DEPARTMENT H ENCE FIRST PAN HAVE ALREADY BEEN SURRENDERED BY THE ASSESSEE AT ME ERUT. THE ASSESSEE HAD ALREADY FILED RETURN OF INCOME AT MEER UT ON 16 TH SEPTEMBER, 2009. THE ASSESSEE, THEREFORE, PRAYED TH AT NOTICE UNDER SECTION 142(1) AND 143(2) MAY BE DROPPED IN THE INT EREST OF JUSTICE. THE A.O. IN PURSUANCE OF THIS REQUEST OF THE ASSESS EE AND MATERIAL ON RECORD, DID NOT PROCEED WITH THE RE-ASSESSMENT P ROCEEDINGS AT GHAZIABAD AND VIDE LETTER DATED 31 ST JULY, 2014 TRANSFERRED THE CASE RECORD TO ITO, WARD-1(1), MEERUT WHO WAS HAVING JUR ISDICTION FOR THE CASE OF THE ASSESSEE. THE LD. D.R. SUBMITTED THAT A S PER RECORD ITO, WARD-1(1), MEERUT DID NOT RECORD ANY FRESH REASONS UNDER SECTION 148 OF THE I.T. ACT SO AS TO PROCEED WITH THE MATTE R. THE LD. D.R. ALSO ADMITTED THAT THERE IS NO TRANSFER ORDER AVAILABLE ON RECORD FOR 7 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. TRANSFER OF REASONS OR RECORD FROM ITO, GHAZIABAD T O ITO, MEERUT OF ANY COMPETENT AUTHORITY. BOTH THE GHAZIABAD AND MEE RUT DISTRICTS ARE SEPARATE AND CONTROL BY DIFFERENT COMMISSIONERS . THEREFORE, WITHOUT THE APPROVAL AND SANCTION OF THE COMPETENT AUTHORITY, THE REASONS AND RECORD OF GHAZIABAD ITO, CANNOT BE TRAN SFERRED TO ITO, MEERUT. THE ASSESSEE IN PURSUANCE OF LETTER OF THE ITO AT MEERUT, SUBMITTED TO ITO, WARD-1(1), MEERUT, THAT HE HAS AL READY FILED RETURN AT MEERUT ON 16 TH SEPTEMBER, 2009, THE SAID RETURN MAY BE CONSIDERED IN COMPLIANCE TO THE NOTICE UNDER SECTIO N 148. THE IDENTICAL ISSUE HAVE BEEN CONSIDERED BY DIVISION BE NCH OF ITAT, AGRA BENCH IN THE CASE OF S.N. BHARGAVA VS. ITO REPORTED IN (2014) 147 ITD 306 IN WHICH IN PARAS 8 AND 9 IT WAS HELD AS UN DER : 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IN THE PAPER BOOK FILED LETTER ISSUED BY ITO 3(4), MATHURA DATED 08.12.2003 AT PAG E 8 OF THE PAPER BOOK, IN WHICH SAME FACTS HAVE BEEN RECORDED REGARDING REOPENING OF ASSESSMENT BY AO AT AGRA AND THEREAFTE R TRANSFERRED THE CASE TO HIM AT MATHURA. COPY OF REA SONS ARE FILED AT PAGE 9 OF THE PAPER BOOK, WHICH TALLY WITH THE R EASONS SUPPLIED BY THE LD. DR FROM THE RECORD. COPY OF THE REASONS SUPPLIED BY THE LD. DR ARE REPRODUCED AS UNDER : 8 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. 'AN INFORMATION HAS BEEN RECEIVED FROM THE DDIT(INV .),GURGAON VIDE LETTER F.NO.DDIT(INV.)/GGN/02-03 DATED 12.03.2003 R EGARDING TRANSACTION OF SHARES RESULTING INTO LONG TERM CAPI TAL GAINS THAT HAS BEEN FOUND BOGUS AS A RESULT OF INQUIRIES MADE BY T HE SAID WING. ON INQUIRIES IT HAS BEEN FOUND THAT THE BANK A/C FROM WHICH MONEY HAS BEEN TRANSFERRED TO VARIOUS BENEFICIARIES HAVE BEEN OPER ATED BY CERTAIN STOCK BROKERS, WHO HAVE BEEN PROVIDING ENTRIES TO THE BEN EFICIARIES BY SHOWING THEM TRANSACTIONS MADE BY THEM IN PURCHASE / SALE O F SHARES OF CERTAIN COMPANIES, WHICH IN FACT NEVER TOOK PLACE. THE ASSESSEE IS ALSO ONE OF THE BENEFICIARY FIGURIN G IN THE LIST SUPPLIED BY THE DDIT WING, GURGAON AND AN AMOUNT OF RS.5,92,809 HAS BEEN REMITTED TO THE ASSESSEE THROU GH DRAFT NO. DD. 186676 DATED 12.04.97 FROM A/C. NO. CA-3097 HEL D IN CORPORATION BANK, KAROL BAGH, NEW DELHI N THE NAME OF M/S. R.K. AGARWAL & COMPANY, 1748/55, NAIWALA, KAROL BAG H, NEW DELHI. THE SAID AMOUNT IS FOUND CREDITED IN THE BAN K A/C. NO. SB/8069, CANARA BANK, VIBHAV NAGAR, AGRA WHICH BELO NGS TO THE ASSESSEE. SINCE THE SAID TRANSACTION OF PURCHAS E AND SALES OF THE SHARES HAS BEEN FOUND TO BE BOGUS AND THEREF ORE, ENTIRE AMOUNT OF SALE PROCEEDS OF SHARES CLAIMED TO HAVE B EEN RECEIVED BY THE ASSESSEE BY BANK DRAFT, IS THE INCOME OF ASS ESSEE FROM UNDISCLOSED SOURCES, WHICH HAS ESCAPED ASSESSMENT W ITHIN THE MEANING OF SECTION 147 OF THE IT ACT, 1961. 9 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. SINCE, NO REGULAR ASSESSMENT HAS BEEN MADE IN THE A SSESSEE'S CASE FOR A.Y. 98-99, APPROVAL U/S. 151(2) OF THE IT ACT IS CONSIDERED NECESSARY TO ASSESS THE ABOVE SAID INCOM E BY ISSUING A NOTICE U/S. 148 OF THE IT ACT, 1961. FROM THE ABOVE, IT IS CLEAR THAT ABOVE REASONS WERE RECORDED BY THE ITO 1(4), AGRA, WHICH ON APPROVAL BY ADDL. CIT, RANGE-I, AGRA, THE ITO 1(4), AGRA ISSUED NOTICE U/S. 148 OF THE IT ACT TO THE ASSESSEE. THERE IS NO OTHER REASONS AVAILABLE ON RE CORD AS PRODUCED BY THE LD. DR. IT WOULD MEAN THAT THE AO A T MATHURA DID NOT RECORD ANY REASONS AT HIS OWN, BUT MERELY F OLLOWED THE SAME REASONS WHICH WERE RECORDED BY THE ITO AT AGRA . NO MATERIAL IS PRODUCED BEFORE US TO COUNTER THE SUBMI SSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. THE DETAILS NOTED IN THE ASSESSMENT ORDER AND THE APPELLATE ORDER WOULD ALSO CLARIFY TH AT INITIALLY THE RE-ASSESSMENT PROCEEDINGS WERE INITIATED AT AGRA AN D THE REVENUE DEPARTMENT FINDING NO JURISDICTION OVER THE ASSESSEE TRANSFERRED THE CASE TO THE ITO, MATHURA AND THE IT O MATHURA ALSO WITHOUT RECORDING FRESH REASONS PROCEEDED U/S. 148 AGAINST THE ASSESSEE ON THE BASIS OF SAME REASONS RECORDED BY THE ITO, AT AGRA. WHEN THE ASSESSEE SERIOUSLY CONTESTED THE JURISDICTION OF THE ASSESSING OFFICER AT MATHURA BECAUSE HE COUL D NOT PROCEED ON THE BASIS OF REASONS RECORDED AT AGRA, THE AO AT MATHURA ISSUED FRESH NOTICE U/S. 148 ON DATED 13.01.2004 WI TH THE APPROVAL OF ADDL. CIT, RANGE-3, MATHURA AND THE SAM E WAS SERVED UPON THE ASSESSEE. THE ASSESSING OFFICER HAS NOWHERE 10 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. RECORDED IN THE ASSESSMENT ORDER IF ANY FRESH REASO NS HAVE BEEN RECORDED AT MATHURA BEFORE ISSUING NOTICE U/S. 148 ON DATED 13.01.2004. THE AO MERELY RECORDED IN THE ASSESSMEN T ORDER THAT FRESH NOTICE U/S. 148 WAS ISSUED ON 13.01.2004 WITH THE APPROVAL OF ADDITIONAL CIT, RANGE-3, MATHURA, BUT T HERE IS NO WHISPER OF RECORDING ANY FRESH REASONS AT MATHURA B Y THE PRESENT AO IN THE ASSESSMENT ORDER. EVEN THE LD. DR DURING THE COURSE OF ARGUMENTS, WHEN PRODUCED ASSESSMENT RECORDS BEFORE US, ACCEPTED THAT THERE IS NO OTHER REASONS RECORDED BY THE AO AT MATHURA. IT WAS, THEREFORE, CLEARLY PROVED THAT THE AO AT MATHURA MERELY ACTED UPON THE REASONS RECORDED AT AGRA, COP Y OF WHICH IS PLACED ON RECORD AND WAS ALSO SUPPLIED TO THE AS SESSEE (PB- 9). IN THE AFORESAID REASONS, IT IS CLEAR THAT THE AO HAS NOWHERE RECORDED THE NECESSARY INGREDIENTS OF SECTION 147 O F THE IT ACT THAT THE AO HAS REASON TO BELIEVE THAT ANY INCOME C HARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR UNDER APPEAL. FURTHER, THE REASONS HAVE NOT BEEN RECORDED BY THE ASSESSING OFFICER OF THE PRESENT ASSESSEE. FURTHER THE CONCERNED AO AT MATHURA HAS NOWHERE REASON TO BELIEVE THAT AN Y INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE ASSES SING OFFICERS AT MATHURA AND AGRA DID NOT EXAMINE ANY OF THE INFORMATION RECEIVED FROM DDIT (INV.) GURGAON BEFOR E PROCEEDING WITH THE MATTER. THE AO AT MATHURA MERELY FOLLOWED THE REASONS RECORDED AT AGRA AND PROCEEDED WITH THE MATTER. HON 'BLE DELHI 11 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. HIGH COURT IN THE CASE OF SIGNATURE HOTELS P. LTD. VS. ITO, 338 ITR 51 HELD AS UNDER : 'HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LAKHS DURING FINANCIAL YEAR 2002 -03 AS STATED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY,, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT SATISFY TH E REQUIREMENTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE TO A NY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR E STABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNE XURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID-UP CAPITAL OF RS.90 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO ALLOT TED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD N OT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WER E NOT VALID AND WERE LIABLE TO BE QUASHED.' 8.1. HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SHREE RAJASTHAN SYNTEX LTD., 313 ITR 231 HELD AS UN DER : 12 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. 'THE ASSESSEE COMPANY HAD LEASED OUT CERTAIN PLANT AND MACHINERY TO ANOTHER COMPANY UNDER AGREEMENTS EXECUTED ON DIFFER ENT DATES FOR A SPECIFIED PERIOD OF TIME. THE DEPRECIATION CLAIMED BY THE ASSESSEE ON THE CAPITAL ASSETS LEASED OUT TO THE LESSEE UNDER SECTI ON 32 OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEARS 1996-97, 1997-98 AND 1998-99 WAS ALLOWED BY THE ASSESSING OFFICER. THE LESSEE HAD CL AIMED REVENUE EXPENDITURE FOR THE LEASE RENT PAID TO THE ASSESSEE BUT THE ASSESSING OFFICER HAD ALLOWED DEPRECIATION ON THE CAPITAL VAL UE OF THE PLANT AND MACHINERY. ON NOTICING THIS FACT, THE ASSESSING OFF ICER OF THE ASSESSEE INITIATED PROCEEDINGS UNDER SECTION 147 OF THE ACT AND MADE AN ADDITION TO THE INCOME OF THE ASSESSEE. THE COMMISSIONER (AP PEALS) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE ASSE SSMENT YEARS 1996- 97 AND 1997-98 BUT DELETED THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEARS 1998-99 AND 2001-02. ON TH E FINDING THAT THAT THE REASSESSMENT PROCEEDINGS HAD BEEN INITIATED ON BORROWED SATISFACTION AND THAT THE LEASE AGREEMENTS BEING OP ERATING LEASES THE ASSESSEE WAS THE OWNER OF THE LEASED ASSETS WHICH W ERE LEASED OUT TO THE LESSEE COMPANY FOR A RENT AND THEREBY THE ASSESSEE WAS ALSO A USER OF THE ASSETS, THE TRIBUNAL HELD THAT THE ASSESSEE WAS ENT ITLED TO DEPRECIATION UNDER SECTION 32 OF THE ACT. ON APPEALS : HELD, (I) THAT THE REASSESSMENT PROCEEDINGS HAD BEE N INITIATED ONLY ON ACCOUNT OF THE OPINION OF THE ASSESSING OFFICER OF THE LESSEE AND THE TRIBUNAL WAS RIGHT IN FIXING THAT IT WAS 'BORROWED SATISFACTION' WHICH 13 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. WAS NOT SUFFICIENT TO CONFER POWER ON THE ASSESSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE.' AFORESAID DECISION HAS BEEN CONFIRMED BY THE HON'BL E SUPREME COURT BY DISMISSING THE DEPARTMENTAL SPECIAL LEAVE PETITION AS IS REPORTED IN 313 ITR (STATUTE) 27. 9. CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR T HAT THE ASSESSING OFFICER AT AGRA WAS NOT HAVING JURISDICTI ON OVER THE ASSESSEE. THEREFORE, HE SHOULD NOT HAVE RECORDED TH E REASONS FOR REOPENING OF ASSESSMENT AND FURTHER HE DID NOT EXAM INE ANY INFORMATION SUPPLIED BY DDIT(INV.) AND THAT HE WAS HAVING NO REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HA S ESCAPED ASSESSMENT AND SUCH FACTS ARE ALSO NOT MENTIONED IN THE REASONS RECORDED FOR REOPENING OF ASSESSMENT. THE AO AT MAT HURA DID NOT DO ANYTHING IN THE MATTER AND MERELY FOLLOWED THE R EASONS RECORDED BY ITO AT AGRA AND THAT HE HAS INITIATED T HE PROCEEDINGS U/S. 148 AGAINST THE ASSESSEE ON BORROWED SATISFACT ION OF ITO, AGRA. HE HAS ALSO NOT EXAMINED ANY RECORD OF THE CA SE OR THE INFORMATION RECEIVED FROM DDIT(INV.). THE REASONS W HICH ARE NOT IN ACCORDANCE WITH LAW HAVE BEEN RECORDED AT AGRA B Y THE ITO, WHO WAS NOT AUTHORIZED TO DO SO AND WAS NOT HAVING JURISDICTION OVER THE ASSESSEE AND THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE AT MATHURA DID NOT DO SO AND MERE LY ACTED ON THE ABOVE BORROWED SATISFACTION. IN OUR VIEW THE IN ITIATION OF RE- ASSESSMENT PROCEEDINGS U/S. 147 OF THE IT ACT IS CL EARLY BAD IN 14 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. LAW AND AGAINST THE PROVISIONS OF LAW. THE ASSESSIN G OFFICER AT MATHURA HAS, THEREFORE, NOT VALIDLY ASSUMED THE JUR ISDICTION TO INITIATE THE RE-ASSESSMENT PROCEEDINGS BECAUSE HE H AS MERELY FOLLOWED THE REASONS RECORDED BY ITO AT AGRA, WHO W AS HAVING NO JURISDICTION OVER THE ASSESSEE. WE ACCORDINGLY S ET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REASS ESSMENT PROCEEDINGS U/S. 147 OF THE IT ACT. IN THE RESULT, ALL THE ADDITIONS WOULD STAND DELETED. THEREFORE, THERE IS NO NEED TO DECIDE THE ADDITIONS ON MERITS, WHICH IS WHOLLY ACADEMIC IN NA TURE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF DECISION IN THE CASE OF SHRI S.N. BHARGAVA (SUPRA), IT IS CLEAR THAT ITO AT GHAZIABAD WAS NOT HAVING JURISDICTION OVER THE ASSE SSEE. THEREFORE, HE SHOULD NOT HAVE RECORDED THE REASONS FOR REOPENI NG OF THE ASSESSMENT AND FURTHER HE DID NOT EXAMINE ANY INFOR MATION SUPPLIED BY INVESTIGATION WING AND THAT HE WAS HAVING NO REA SONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T IN HIS JURISDICTION AND SUCH FACTS ARE ALSO NOT MENTIONED IN THE REASONS RECORDED FOR REOPENING OF ASSESSMENT. THE ITO, WARD -1(1), MEERUT, DID NOT DO ANYTHING IN THE MATTER AND MERELY FOLLOW ED THE REASONS RECORDED BY ITO AT GHAZIABAD AND THAT HE HAS INITIA TED THE 15 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. PROCEEDINGS UNDER SECTION 148 AGAINST THE ASSESSEE ON BORROWED SATISFACTION OF ITO, GHAZIABAD. HE HAS ALSO NOT EXA MINED ANY RECORD OF THE CASE OR INFORMATION RECEIVED FROM INVESTIGAT ION WING. THE A.O, MEERUT DID NOT RECORD ANY REASON FOR REOPENING OF T HE ASSESSMENT UNDER SECTION 148 OF THE I.T. ACT. THE REASONS WHIC H ARE NOT IN ACCORDANCE WITH LAW, HAVE BEEN RECORDED AT GHAZIABA D BY THE ITO WHO WAS NOT AUTHORISED TO DO SO AND WAS HAVING NO J URISDICTION OVER THE ASSESSEE AND THE ITO HAVING JURISDICTION OVER T HE ASSESSEE AT MEERUT DID NOT DO SO AND MERELY ACTED ON THE ABOVE BORROWED SATISFACTION OF ITO, GHAZIABAD. IN MY VIEW, THE INI TIATION OF RE- ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE I.T . ACT IS CLEARLY BAD IN LAW AND AGAINST THE PROVISIONS OF LAW. THE I TO AT MEERUT HAS, THEREFORE, NOT VALIDLY ASSUME THE JURISDICTION TO I NITIATE THE RE- ASSESSMENT PROCEEDINGS BECAUSE HE HAS MERELY FOLLOW ED THE REASONS RECORDED BY ITO AT GHAZIABAD WHO WAS NOT HAVING JUR ISDICTION OVER THE ASSESSEE. THE ISSUE IS THEREFORE, COVERED IN FA VOUR OF THE ASSESSEE BY ORDER OF DIVISION BENCH OF ITAT, AGRA BENCH IN T HE CASE OF S.N. BHARGAVA (SUPRA). I, ACCORDINGLY, SET ASIDE THE ORD ERS OF THE AUTHORITIES BELOW AND QUASH THE RE-ASSESSMENT PROCE EDINGS UNDER 16 ITA.NO.1632/DEL./2017 ANANT CONCRETE PRODUCTS PVT. LTD., MEERUT. SECTION 147 OF THE I.T. ACT, 1961. IN THE RESULT, A LL THE ADDITIONS WOULD STAND DELETED. THEREFORE, THERE IS NO NEED TO DECID E THE ADDITION ON MERIT WHICH IS WHOLLY ACADEMIC IN NATURE. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 08 TH NOVEMBER, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.